Regular saver + High interest account

sunshowers

Hi everyone, I need help sorting out my finances...

I'm a full-time student (so I don't pay tax). I'm in my 2nd yr, and I've taken out the maximum loan out this yr and the last. I want to maximise the interest I get but I'm not sure how. I have about £3,500 right now to play with; this will increase when I get my next loan payment (early next yr).

I would like to open a regular saver account at Lloyds TSB (interest 8%) but wanted to know where I should put the bulk of the money to start off with (at the moment it's drying up in a current account at Abbey!)

I was thinking of putting everything into a Halifax Websaver (interest 4.75%), and then setting up a regular monthly payment of £250 into Lloyds TSB.
Does that sound like a good plan, or is there a better way of doing things?

It does mean that I have to open 4 new accounts (you need to have a current account with them in order to open the above accounts). Also, on maturity, the Lloyds tsb regular saver is convert to a Guaranteed Tracker. Will I be able to close this account, transfer all the money into the Websaver and repeat the whole process by getting a new Lloyds TSB regular saver account? Or is there an easier way, using different accounts (or whatever) to arrange things to let it just cycle automatically?
I'm reluctant to save with icesave and icici after reading the about the way other moneysavers have been treated, and money getting lost, etc.

Sorry about the long post, I've tried to be as accurate as possible. Let me know if theres anything else you need to know.
Thank you all very much in advance!!

tom188

Thats one way of doing it.

Else you could open a Lloyds TSB online saver (6 month bonus but close after that and open another one and you get the bonus again). This would save interest lost during the 3 days a normal BACs transfer/standing order takes.

Halifax Websaver is useful in that it allows you to set up standing orders, which most saving accounts dont.

Otherwise look on Moneyfacts/Moneysupermarket to find a decent savings account, preferably that will allow you to transfer directly to your regular saver (cahoot does for example).

As regards what happens afterwards, who knows what Lloyds will be offering 2 years down the line. The account will not necessarily be available again.

sunshowers

would it be easier instead to open a regular saver (7%) and websaver (4.75%) with halifax and allow a constant cycling?
So once the term is over, the whole process just repeats itself. It would save having to open 4 accounts, and all the trouble at the end of the 2 years with Lloyds TSB

jono_3-2_2

Hi

Why not open a current account with Nationwide and then an e-saver

The former pays 4.25% the latter 4.8%.

Internet banking etc etc

Jon

tom188

I think the OP is aiming to maximise their interest.

Halifax RS/WS combination is good as well, I have both accounts and do this. However what sets the Lloyds RS apart is the fact that while the whole lot in the Halifax RS will be swept back to the WS at the end of year 1, that in Lloyds continues to benefit from the higher interest rate for a second year. It also allows a £500 initial contribution.

I guess it depends whether you want simplicity or the best returns.

sunshowers

Thank you for the suggestions - very helpful

Another thing is that I have had trouble opening a student account with Abbey a while ago (the reason they gave was a low credit score)

Does that mean I will have trouble opening the above accounts?

Will I need to get a credit card or something a use it for a few months before I can start opening the accounts?

tom188

Savings accounts - shouldnt be a problem.

Current account with LTSB may be more difficult, but I would suggest visiting a branch and they should hopefully sort something out for you (rather than applying online). Just dont expect an overdraft or anything too fancy.

Personally I got the Halifax stuff when I was a student and the LTSB stuff after I graduated but before I got a job, so hopefully you wont have a problem.

Credit cards would probably be more difficult for someone in your position to get than the accounts themselves.

sunshowers

Hey everyone

sorry to resurrect this thread, but I read somewhere that you cant set up a direct debit from the Halifax Websaver to an external organisation.

Does that mean that I won't be able to transfer £250 from the Web Saver to the LTSB Regular Saver each month? I'd have to move £250 into the Halifax current account along side it a few days early or something?

tom188

You can set up a Standing order to an outside organisation.
You cannot set up a Direct debit to an outside organisation.

You want a standing order, so will be ok

sunshowers

This may seem like a stupid questions but...

what is the difference between a standing order and a DD?

tom188

For a standing order the paying bank "pushes" the money to the receiving bank. You tell the paying bank how much you want to pay, and how regularly.

Direct debits are the opposite. The receiving bank "pulls" the money from the paying account. You tell the receiving bank when you want the money to be taken from your paying account.

So two things happen from opposite ends.